Labopharm and Angelini Complete the Restructuring of their Partnership

- Labopharm Transfers OLEPTRO™ to Angelini for U.S.,
Canada and Other Countries Globally in Exchange for a Royalty -

LAVAL, QC, Oct. 5, 2011 /CNW/ - Labopharm Inc. (TSX: DDS) and
Gruppo Angelini (Angelini), its partner in the joint venture
established by the two companies to commercialize OLEPTRO™ in
the U.S., today announced that they have completed the previously
announced restructuring of their partnership. Under the terms of
the new agreement, Labopharm has granted Angelini an exclusive
license and rights related to OLEPTRO™ in the U.S., Canada
and other countries globally in exchange for a royalty on product
sales. The two companies have terminated the existing joint venture
agreement and ancillary agreements established in May 2010 and have
dismantled the joint venture. Angelini has acquired Labopharm's 50%
ownership interest in Angelini Labopharm, LLC. The Irish
corporations related to the joint venture will be dissolved as part
of the transaction.

Labopharm will receive a royalty of 5% on net sales of
OLEPTRO™ in the United States in excess of US$10 million in
any calendar quarter. Net sales of OLEPTRO™ in the United
States for the most recent quarter ended June 30, 2011 were $1.2
million. In addition, Labopharm will receive a royalty of 5% on net
sales of OLEPTRO™ in those countries for which it is granting
rights to Angelini, including Canada, where OLEPTRO™ has
received regulatory approval, and other countries globally, for
which Angelini does not already have the commercialization rights.
As a result of the restructured agreement, Angelini is now the sole
owner of all commercialization rights related to OLEPTRO™
globally.

As part of the completed restructuring of the joint venture,
Labopharm has granted to Angelini an exclusive license and rights
to develop and commercialize Labopharm's twice-daily acetaminophen
product in all European Union countries, Turkey, Georgia and the
Commonwealth of Independent States (Armenia, Azerbaijan, Belarus,
Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan,
Turkmenistan, Ukraine, Uzbekistan). Should Angelini develop and
commercialize this product, Labopharm will receive a royalty of 5%
on net sales of its twice-daily acetaminophen product in the
aforementioned countries. Labopharm will also receive milestone
payments upon signing of the agreement and the achievement of an
agreed-upon sales milestone.

In the event that the agreement for the twice-daily
acetaminophen product is terminated, under specific conditions,
Labopharm shall have the option to require that Angelini grant back
to Labopharm all rights granted under the agreement for, amongst
others, the development, use and distribution of twice-daily
acetaminophen in consideration for a royalty payment equal to 3.5%
of the net sales in the country in which the termination occurs.
Termination of the agreement could, amongst others, be triggered by
one of the following: (i) Failure by Angelini to meet its Minimum
Annual Purchase Quota in any two successive contract years; (ii)
Angelini does not begin development activities related to the
Development Plan for the product prior to July 31, 2012, or in the
event Angelini has not begun any clinical studies related to the
product within a pre-determined delay.

About Labopharm Inc.
Labopharm is focused on realizing value from its commercialized
products and creating additional value by leveraging its emerging
technology platforms to develop increasingly differentiated
products. For more information, visit www.labopharm.com.

This press release contains forward-looking statements within
the meaning of applicable Canadian Securities legislation,
including, statements concerning the restructuring of the joint
venture with Gruppo Angelini, statements concerning OLEPTRO™
for the United States, Canada and other countries globally, and
statements related to Labopharm's twice-daily acetaminophen product
which reflect Labopharm's current expectations regarding future
events. These forward-looking statements involve risks and
uncertainties, many of which are beyond Labopharm's control. Actual
events could differ materially from those projected herein and
depend on a number of risks and uncertainties, including risks
related to Labopharm's ability to complete partnering transactions
and the terms of any such collaboration, if any, risks related to
the market acceptance of Labopharm's products and the speed of
adoption by clinicians, risks related to intellectual property
protection and potential infringement of third-party rights, risks
related to research and development of pharmaceutical products and
regulatory approvals, and risks associated with intense competition
in the pharmaceutical industry generally. For additional disclosure
regarding these and other risks faced by Labopharm Inc., see the
disclosure contained in its public filings with the Canadian
Securities Administrators (CSA), available on the Investor
Relations section of Labopharm's website at www.labopharm.com and
on the CSA's website at www.sedar.com. Investors are cautioned not
to place undue reliance on these forward-looking statements. Unless
required by law, Labopharm undertakes no obligation to update or
revise the information contained in this press release, whether as
a result of new information, future events, or circumstances or
otherwise.